Australia's Aurizon guidance disappoints but analysts still see value in stock

Aurizon Holdings

08/08/2022 20:50

** Citi Research says Aurizon Holdings'  AZJ.AX  risk-reward
outlook is balanced, with growth in its bulk business offset by
declines in coal business; raises PT to A$4.17 and retains
"neutral" rating 
    ** Rail freight operator on Monday said FY22 underlying NPAT
fell 2% from a year ago to A$525 mln ($362.46 mln)  urn:newsml:reuters.com:*:nL4N2ZK045
    ** AZJ now expects FY23 EBITDA between A$1.47 bln and A$1.55
bln, missing analyst expectations
    ** Citi lowers AZJ's core NPAT estimates for FY23 by 2%, but
raises FY24 and FY25 estimates by 4% and 6.5%, respectively
    ** Morningstar says AZJ stock is "attractive", despite
downgrading near-term earnings forecasts
    ** "We expect an improved performance in subsequent years as
very few of the firm's coal haulage contracts mature in the next
few years, allowing consumer price index-linked tariffs and 
recovering volumes to boost revenue" - Morningstar
    ** Jefferies says AZJ's earnings are expected to remain well
protected in the current environment but lowers PT to A$4.88
from A$5.04 to account for revised guidance estimates
    ** Two of 12 analysts rate the stock "buy" or higher, five
"hold" and five "sell" or lower; their median PT is A$3.92 –
Refinitiv data
    ** Stock up 11.8% this year, as of last close
    

 (Reporting by Harish Sridharan in Bengaluru)
 ((harish.sridharan@thomsonreuters.com;))